8 INDUSTRY NEWS
Persimmon results show it’s fully sold for the year
Indicating strong results and revealing some of its future investments, Persimmon has released its third quarter Trading Statement, covering the period from 1 July 2018 to 6 November 2018.
The company has revealed it is now “fully sold up” for the current year, with around £987m of forward sales reserved beyond 2018, an increase of 9 per cent on the same point last year (2017: £909m). Sales prices have also reportedly remained firm for the builder across regional markets. According to the statement, customer
activity at the start of autumn has strengthened in line with traditional seasonality. Private sales in the period since the half year results were 3 per cent ahead of the previous year’s comparatives. The group’s outlet network has been around 5 per cent stronger through this period, and Persimmon is currently deliv- ering new homes in around 370 communities nationwide. Consumer confidence and continued mortgage lender support were listed as providing the positive market conditions the company has enjoyed, with mortgage approvals for the third quarter increasing from levels seen in the first two quarters of the year. Plans for a new regional operating
business in South Yorkshire in January 2019 were also released in the firm’s statement, to be located at its off-site manufacturing hub at Harworth, bringing the number of house- building businesses in the group to 31. Other investments noted were in its new brick manufacturing plant, which is now operating at capacity, and in its new roof tile manufacturing facility, which is now under construction.
As to the coming years, the statement
reads: “Persimmon is in a very strong position for the future and while we are mindful that there is uncertainty associated with the UK’s withdrawal from the EU, the company’s investment over recent years in a high quality landbank provides a sustainable long-term platform for each of our 31 regional businesses and enables the group to be very selective with future investments.
“By adopting this position, the group has
acquired over 4,750 new plots of land, and spent over £180m, including payment of
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deferred land creditors, during the period. Of the replacement land acquired so far this year, 23 per cent has been converted from the Group’s strategic land holdings.”
Property firms reveal their Brexit choices
79 per cent less homes built for social rent than 10 years ago
The number of new homes built for social rent has fallen 79 per cent over the past decade, according to MHCLG Affordable Housing Supply statistics.
The latest official figures from the Local Authority Housing Register for England show that the average local authority has over 3,500 families on its council housing waiting list. In England alone, 1.25 million families remained on the waiting list for social housing between 2016-17. Almost two-thirds (65 per cent) of families had been waiting for a home for more than a year.
UK businesses are increasingly concerned about the impact that current political and economic uncertainty will have on the industry, according to a survey from Crowe. 30 per cent of the property businesses surveyed identified the Brexit negotiations as the biggest concern to their business, with 44 per cent stating they would prefer a soft Brexit, and 37 per cent stating that they would prefer no Brexit at all. Despite this, 62 per cent of respondents remained confident in their growth plans for the next 12 months. 60 per cent of participants reported that they currently encounter little or no difficulty obtaining funding, with 36 per cent suggesting access to funding has improved compared to 24 per cent in the previous year. For the fifth consecutive year, respon- dents highlighted the current UK tax system as unfavourable for developers and investors, with more than 82 per cent identifying Stamp Duty Land Tax as the biggest tax barrier to business growth. In addition, 77 per cent of respondents highlighted that Green Belt protections are not conducive to solving the housing crisis. The ‘Property and Construction Outlook Report 2018’ is intended to provide a snapshot of views across the sector as Brexit draws closer.
Scape Group recently surveyed local authority officers with management respon- sibility for housing in their council. It found that 100 per cent would like to be able to fund and build more housing for social rent directly in their area. Also, 35 per cent believed that the skills shortage within the construction industry was one of the main barriers preventing councils from building more housing in their area, and 24 per cent commented that slow construction was a major barrier, rising to 42 per cent in the Midlands, Eastern England, and Yorkshire. Mark Robinson, Scape Group chief executive, commented: “To return to the halcyon days of social rented housing construction, local authorities must find a way to persuade Government they are best positioned to address the challenge and that they have a credible plan to achieve results.
“Local authorities will need to demon- strate they have a plan to circumvent problems, such as the skills shortage in the construction industry, that could hold back a huge increase in the construction of social rented homes.
“So to truly see a revolution in council
building, the Government needs to consider ways of adjusting the planning system to create fast track routes for modular homes to be built.”
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